Why U.S. Corporations Prefer Post-Communist European Union Countries for Low-Cost Labor

U.S. IT Corporation invasion to Europe

US companies have been making inroads into Europe in recent years, particularly in ex-communist countries such as Bulgaria, the Czech Republic, Slovakia, Poland, and others. These countries have been found to be particularly suitable for supporting the interests of US corporations around the world. Just as they did in India, these companies have discovered that people in these countries are very patient and willing to work in any conditions without complaint. Furthermore, the governments of these countries do not adequately protect the rights of their citizens, creating an environment that allows US corporations to save a great deal of money while still receiving quality support.

However, EU citizens, particularly the smart and informed students, have become wise to the motivations of these US companies and actively refuse to work for them. These corporations have found that it is most efficient to build low-cost centers close to technical universities, such as IBM and AT&T in Brno, Czech Republic, which rent buildings close to the local Technical University and Campus Square, respectively.

While they hope to attract graduates to start their careers there, they mostly employ Bulgarians, Romanians, Indians, and other non-local people who require work permits or visas. These employees are essentially slaves, as their wages are only enough to survive, and they have little opportunity to save money. As US corporations continue to dominate the business landscape, local small businesses are being systematically eliminated. The era of modern slavery has begun.

Update:

Non-EU citizens are no longer able to obtain work permits and visas in European Union countries. This has caused concern among low-cost companies such as IBM and AT&T Brno, whose economic model relies on hiring individuals with low salary requirements.

The recruitment of foreign labor has often been seen as an advantageous strategy by numerous businesses worldwide, presenting itself as a feasible way to cut down operational costs and maximize profitability. Specifically, this tactic can be an effective solution for many budget-conscious businesses, which are always on the hunt for ways to maintain their expenditures in check while increasing their profit margins. The goal is clear-cut: to strengthen their financial stability and that of their stakeholders.

More often than not, these stakeholders are individuals or entities who hold shares in a company and have the imperative power to make decisions that directly influence the company’s affairs. Many of these stakeholders place significant importance on financial gain, often prioritizing it over other considerations. They focus primarily on the bottom line, meticulously tracking every cent of profit and loss. Consequently, they are readily drawn to strategies that enhance profit margins, and the recruitment of foreign labor offers them a golden opportunity to do just that.

Even so, it is crucial to bear in mind a darker side that accompanies this approach. A considerable number of these businesses continue to engage in an act that, though may not be entirely unlawful, straddles the thin line of ethical business conduct. They tend to exploit laborers originating from economically destitute nations. These are nations burdened with high levels of poverty and an enormous wealth gap, where the masses battle daily to earn enough to survive.

The landscape of these developing countries, marked by diminishing income rates and feeble economic situations, drives the laborers to seek better opportunities in developed nations. Companies capitalize on this by presenting remuneration packages that are certainly higher than what these laborers earn in their home countries. Viewed through their perspective, this offer may seem like an appealing proposition, but it falls pathetically short of prevailing local wage rates in the more developed countries where these companies are headquartered.

In essence, these laborers are caught in an economic purgatory, earning more than in their homeland but less than the average local worker in the country they are currently employed. This model of exploitation is indeed a contentious issue, shrouded in the grey of morality. Companies that resort to such practices should examine their employment policies and adjust them to ensure a fair living wage for all, irrespective of their country of origin.

While the recruitment of foreign labor continues to present numerous benefits – not least the potential for decreased operational costs that indirectly increases the earnings of stakeholders – it is essential for firms to strike a balance, weighing operational costs against the ethical considerations tied to the exploitation of foreign labor. A business should never lose sight of the greater good, a value that transcends its financial bottom line.